The money they are giving you are saved only because they didn't pay rent for the last 6 months, sold all appliances, water heater, garbage disposer and the toilet bawl, didn't pay their utility bills for a big portion of their stay and managed to squeeze additional $2,000.00 as cash-for-keys from their last landlord.

We will try it out for a few more months, worst case I will sell in the spring/summer and 1031 back to Phoenix :)

The existing rental agreement specifies that the tenant is responsible for all their own utility usage bills (I pay water for the building, as is typical).

House will rent for 1200 and the apartment for 650The house needs about 20,000 in work, and the apartment is rent ready besides a new water heater and baseboard heaters.

Here's a list of what's included with this home:New drywall & insulationAsbestos abatementNew copper plumbingNew air conditioning, and FurnaceNew recessed lighting throughout New bathrooms (two bathrooms)New kitchen cabinetsTankless water heaterNew garage door New roofHard-wood flooring ceramic tileNew granite kitchen cabinetsUpdated Fireplace in the living roomNew interior and exterior paintI'm no expert but this seems extremely high.

Electrical needs complete replacement (wiring, electrical box) but the house has newer roof and appliances (heating and water heater are recent), and the plumbing looks recent, which is all surprising given the state of the rest of the house...It's basically a roof and a brick frame with appliances.

I'm going down the path of multi-family buy and hold RE  and might dip my feet into the house flipping  waters.

I’ve found this especially true in water pipe freezing states. 

I have my sights set on a great four family that I'm hoping to have purchased by Spring but there's definitely a lesson to be learned here.  

I’ll be moving to Houston from CO this Spring and I need an investor friendly Real Estate agent to help me navigate the area.